Real Estate Teams are a Scam

Real estate teams are a scam!

Before you send me a bunch of hate mail, hear me out...

This was actually something that I heard from a new agent who was interviewing and did not know whether she wanted to go to a team or an individual agent route, and was still just talking to me for advice. 

I run a real estate team, so my knee-jerk reaction was, “No, she doesn’t know what she’s talking about,”  But I thought about it for a second, and realized that she is actually not wrong. The truth of the matter is, I think most real estate teams are kind of a scam because most real estate teams, the way they operate, are not a good business. And honestly, in my experience, they do not provide a whole heck of a lot of support for their agents.

The real estate teams that exist out there exist commonly for one reason: to support the team leader. Unfortunately, that is how most real estate teams are set up. They are what I call the "Hero and Minions" model where you have got the "hero" that sits up at the top and all the "minions" that serve the hero.

There are a few good real estate teams out there - I know of severalfriends that run teams that actually run amazing and phenomenal teams - but they all practice servant leadership where the leader is there not to be supported by the agents on their team. They are there to truly support the agents. 

So, I came up with four questions that I think any agent who is interviewing or thinking about getting on a team and interviewing team leads need to be asking to make sure that they have got somebody who is really there to serve them, the agent, and not the agent serving the leader.

1. What is the business plan? 

2. What is their value proposition?

3. How do they make your life easier?

4. How do they streamline your sales pipeline?

What is the business plan? 

I think it is really important that the team leader be able to help you work your business backwards.

When an agent comes on our team, we can, in under five minutes, break down what the annual goals are and what that means for production today. What do you need to do today to make sure that you get your goals by year's end?

I will tell you that probably 98% of team leaders that I know do not know their own numbers. So, if they do not know their own numbers or even know how to come up with them, how can they possibly lead you to the promiseland and help you get to know your numbers?

This is a business. You have to run it like a business. Do you think people who run McDonalds or pottery barn do not actually know their own numbers? I will tell you the McDonalds of the world, they know how much the bun costs, how much the hamburger costs, how much the cheese costs, the ketchup, everything.  They have it down to the tenth of the penny. They know how much everything costs so they know how much to charge. To reach their goals, they know how many hamburgers they need to sell. We do not sell hamburgers, we sell houses, obviously. But the same rules apply. 

So a good team leader, if they are running a good business, can break that all down for you very easily. They should be very fluent in that process. 

What is their value proposition?

This is something that I find crazy elusive to a lot of real estate agents and even a lot of team leaders. And, I am not talking about the value proposition to agents coming on the team but just, in general, to clients. What is it about that team or team leader that they do that nobody else does? Why should somebody pick that team leader or that team to do business with?

This is something that I think all businesses have to answer. If you are a successful business, there is something that you are doing in the marketplace that is better, different and/or exclusive. The wrong thing is being able to just say something that everybody else can claim to like "I give good service." Okay, well, duh... Who is going to say that they don't? Beyond that, as a consumer, how do you prove or disprove that? There is no way to measure whether they give good service or not. They have to have a distinct value proposition. What is it that draws clients in? Why should clients work with that team? If you are going to be a part of that team, you need that value proposition, especially if you are a new agent. You need a way to set yourself apart in the market. And so, that value proposition that the team brings is going to be critical to your success. If they do not have one, that is a gigantic red flag. 

How do they make your life easier? 

How does the team or the team leader make your life easier administratively? In sales, we have the highest and best use of time.

There is this concept that when you are spending time doing something, it should be the highest and best use of your time. It should not be doing things like scheduling your home inspection. That is not something that adds money to your bottom line. You have already secured the client. They have built the rapport and trust with you enough to work with you to make an offer. You have already made the offer. You have already negotiated the offer. You have landed the contract. You have come to a point where you are servicing the business that you have already won.

Your job as a sales person should be going out and finding new clients and new families that you can help, earning their trust, earning their business and landing the deal. That is your highest and best use. That is your superpower, connecting with people and helping people. Making that real estate team should be taking off the plate of their agents so that the agents can stay laser focused on building their business or spending more time however they deem fit, with friends, family, doing hobbies or whatever. It should be incumbent on the team and the team lead, to make their agents’ administrative lives a heck of a lot easier. 

I do not see enough teams where that is the case. The agents are still their own transaction coordinator. They are still scheduling their own home inspections. To me, that is insane. Your team, at a minimum, should be helping you with some of that.

How do they streamline your sales pipeline?

When leads come in, what does the team do to help you convert those leads into clients or referral machines? This is really important, too. If a team leader is worth their salt, there is a system and a process in place. If they don't, then they are still figuring this business out for themselves. This is a very basic part of business. It is not all about just getting on the phones. There should be some automation there. There should be some support that they can offer to make your life, even in the sales realm, a little bit easier. Maybe they are masters of scripts and dialogues. That would help. We need to know how to handle objections. That would be helpful if they can help work through some of that with you. But beyond that, there should be additional support to help you move leads through the sales funnel through the pipeline and ultimately transact deals with you.

Are real estate teams a scam? Many of them but not all. You have to do your due diligence if you are looking to join a team. They can absolutely take your business to the next level really quickly. But, you have to find the right ones. And, they are, unfortunately, few and far between. Whether you are coming on our team or looking for other teams, I would be happy to help frame the argument. What should you be asking? What are the answers that you are looking for?

Text me at 571-393-1082 if you want to dive a little deeper on this.